LEXINGTON, Ky. -- Prominent Thoroughbred owner and breeder Ahmed Zayat is back in legal trouble, this time involving breeding rights to Triple Crown winner American Pharoah.
At an emergency hearing on Wednesday, Fayette County Judge Kim Bunnell granted a motion ordering a receiver to seize control of Zayat Stables, including its horses.
The move came after a New York investment group filed a lawsuit in Lexington this week seeking at least $23 million dollars from Zayat, accusing him of selling breeding shares to 2015 Triple Crown and Breeders' Cup winner American Pharoah that were being used for collateral on outstanding debts.
Zayat and Zayat Stables are named as defendants in the lawsuit, which was filed Tuesday in Fayette County Circuit Court by MGG Investment Group, a New York-based investment firm, according to court records.
MGG had made multiple loans to Zayat Stables, which were being secured by all of Zayat's assets, horses and breeding rights, according to the lawsuit.
In the lawsuit, MGG accuses Zayat of misrepresenting those assets. The investment firm says Zayat defaulted on the millions in loans in September.
The firm asked for a receiver appointed to take over the day-to-day operations of Zayat Stables to protect its interest in the remaining horses, which are collateral, according to the suit. Bunnell granted that motion Wednesday.
American Pharoah, the 2015 Horse of the Year and 2014 Eclipse Champion, stands at Coolmore's Ashford Stud in Versailles for a private stud fee reportedly above $200,000. In 2019, according to The Jockey Club, American Pharoah was bred to 178 mares. He was champion U.S. freshman sire last year.
But MGG says that Zayat claims he is broke.
In an email to the investor in the lawsuit filing, Zayat said "I have pushed myself to the brinks of bankruptcy personally by using every dollar I have in America to fund the company until I find an investor to pay you in full." He indicated he planned to meet with Fasig-Tipton about a potential dispersal sale.